Supreme Court New South Wales Medium Neutral Citation: Ryding v Miles & Ors [2012] NSWSC 153 Hearing dates: 12 - 15 December 2011, 10 February 2012 Decision date: 01 March 2012 Jurisdiction: Equity Division Before: Black J Decision: Proceedings dismissed. Catchwords: CONTRACTS - Construction - Implied terms - Whether a lease contained implied term extending owner's consent to development application to performance of work the subject of development application. CONTRACTS - Breach of contract - Whether alleged breaches established. Legislation Cited: - Environmental Planning and Assessment Regulation 2000 (NSW) Sch 1, Pt 2, cl 2 - Environmental Planning and Assessment Act 1979 (NSW) ss 78A(8), 79C, 91A(2), Sch 3, 98 Cases Cited: - Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310 - Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 - Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344 - Bebonis v Angelos [2003] NSWCA 13; (2003) 56 NSWLR 127 - BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 - Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653 - Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 - Carpenter v McGrath (1996) 40 NSWLR 39 - Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 - Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 - Dhailwal v Pade [2003] NSWCA 16 - GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; (2003) 128 FCR 1 - Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145 - Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313; (2000) 10 BPR 18,235 - Koufos v C Czarnikow Ltd [1969] 1 AC 350 - Mackay v Dick (1881) 6 App Cas 251 - Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 - McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 - Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126 - Pilkington v Wood [1953] Ch 770 - Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 - Segenhoe Ltd v Atkins (1990) 29 NSWLR 569 - Sellars v Adelaide Petroleum NL [1994] [1994] HCA 4; (1994) 179 CLR 332 - St George Commercial Credit Corp Ltd v Collins Wallis Properties Pty Ltd [1998] NSWSC 649 - TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130 - Wenham v Ella (1972) 127 CLR 454 Category: Principal judgment Parties: Richard Ryding (Plaintiff) Elaine Miles (First Defendant) John Wallace Stewart (Second Defendant) Alan Bruce Miles (Third Defendant) Gregory John Stewart (Fourth Defendant) Representation: Counsel: D. A. Lloyd (Plaintiff) J. Lazarus (Defendants) Solicitors: Byrnes & Cox (Plaintiff) Donovan Oates Hannaford (Defendants) File Number(s): 07/258209 Judgment 1These proceedings concern a quarry conducted at land at Frederickton, New South Wales ("the Land"). Title to the Land is in the name of Mrs Miles and Mr John Stewart as life tenants and Mr Alan Miles and Mr Gregory Stewart as remaindermen. The Land is primarily used for beef cattle grazing and approximately 5% of its area is occupied by the quarry that has operated intermittently since approximately 1970. The Plaintiff ("Mr Ryding") operated a business under the name Richard Ryding Earth Moving Contactor and engaged in, among other things, construction and quarry work. 2Mr Ryding contends that he has suffered loss by reason of the Defendants' failure to sign a consent form relating to a development application to Kempsey Shire Council ("the Council") for installation of a weighbridge and associated road works ("the weighbridge DA") and the position they took in correspondence concerning the performance of the relevant works. He contends the Defendants' position prevented him obtaining Council's consent to the use of a weighbridge and also prevented him obtaining Council's consent to increase the level of extraction from the quarry from 5,200m 3 per annum (which was permitted under existing use rights in respect of the Land) to an average of 20,000m 3 per annum. Mr Ryding's evidence 3There were several difficulties with Mr Ryding's evidence. For example, Mr Ryding gave reasonably detailed affidavit evidence of a conversation with Mr John Stewart and Mrs Miles in late 2002 concerning his intention to seek an increased output for the quarry and his wish to install a weighbridge and change the roads on the Land to accommodate the weighbridge. His evidence was that he asked Mr John Stewart and Mr Miles whether they had "any problems with that" and they responded "no" (Ryding 10.12.10 [62]). However, in cross-examination, Mr Ryding accepted that a development application for a weighbridge had not been considered at that point (T73) and that he did not tell anyone of any intention to increase the extraction rate of the quarry prior to October 2003 (T75.47-T76.1). Mr Ryding also gave evidence in cross-examination of significant conversations with Mr Alan Miles and Mr Greg Stewart concerning the increase in the quarry's output that had not previously been set out in his affidavit (T76-78). These conversations were sufficiently important that the late recollection of them causes concern as to the accuracy of Mr Ryding's evidence. 4Mr Ryding also contacted a witness to be called by the Defendants, Mr Everson's, in November 2011 and suggested to him that his (Mr Everson's) evidence was incorrect and that he (Mr Everson) had told Mr Ryding in 2006 that Mr Ryding was not welcome to use his (Mr Everson's) company's weighbridge (T120-121). Mr Everson was firm in his evidence that he had never taken that position with any potential user of his company's weighbridge and I accept his (Mr Everson's) evidence in that regard. 5These matters related to issues that were critical to the outcome of the proceedings and cause me wider concern as to the reliability of Mr Ryding's affidavit evidence. I would generally prefer the evidence of the other witnesses where there is a conflict in the evidence unless Mr Ryding's evidence is corroborated by other documents or against his interests. Chronology of events 6I should first set out a chronology of the relevant events. Many of those events are uncontroversial, although I have had to resolve some disputes of fact. There are other disputes of fact that, in my view, were not relevant to any matter that ultimately needed to be decided in these proceedings and which it has not been necessary to address. 7It appears that an oral agreement was reached between Mr Ryding and at least Mr John Stewart in October 1990 to permit Mr Ryding to extract gravel from the Land, although the terms of that agreement do not appear to be relevant to the matters in issue in the proceedings. Mr Ryding extracted gravel from the land and sold it from 1990 onwards. From 1993, Mr Ryding also crushed gravel on the land and sold the crushed gravel. 8On 24 January 2002, Mr Dutton, who was acting as a consultant to Mr Ryding, wrote to the Council enclosing a development application for a gravel crushing plant (Ex D5). The documents in support of this development application included a statement of environmental effects (Dutton 2.12.11, CB1/383-384). Mr Dutton's letter to Council stated that " it is not proposed to extract more than 30,000 tonnes per annum. The peak extraction rate will be of the order of 12,500 (10,000 cubic metres) per year ." Mr Ryding contends that this development application was not for increased extraction at the quarry. While that statement is strictly correct, the covering letter under which it was submitted contemplated an increased extraction volume beyond that which the quarry was then authorised to undertake. 9Mr Ryding and the Defendants signed a lease ("the Lease") over the Land on 1 April 2002. The Lease was prepared by Mr Ryding's solicitor, Mr Kevin Byrnes and was not the subject of negotiation, and none of the Defendants took legal advice before signing the Lease (T59.12-13). The term of the Lease was ten years commencing on 1 April 2002 and terminating on 1 April 2012, with an option for renewal for a further five years that has been exercised by Mr Ryding. The Defendants contend that it is unclear whether the Lease is a lease, licence or profit a prendre, but it is common ground that it is not necessary to decide that matter since Mr Ryding's claim is brought in contract. 10By letter dated 13 May 2002, the Council advised that the maximum annual extraction level for the quarry was 5,200m 3 per annum (Dutton 10.12.10, MD 11). 11In September 2002, Mr Ryding advised the Defendants of a requirement by the Council that he construct a sound wall on the Land as part of the conditions of consent for the crushing plant and the Defendants consented to his doing so, and also agreed to his constructing a drain on the land to meet the Council's requirements. 12It is common ground that Mr Ryding advised Mr John Stewart in about November-December 2002 that he wished to install a weighbridge on the land and asked Mr John Stewart and Mrs Miles to sign the "owner's consent" section of a development application to be lodged with the Council ( Ryding 10.12.10 [62]) and that Mrs Miles and Mr John Stewart told Mr Ryding that they would consent to his lodging a development application to construct a weighbridge. The question whether Mr Ryding and Mrs Stewart also consented to the construction of the weighbridge (as distinct from the lodgement of the development application for the weighbridge) and alteration of roads was disputed. 13Mr Ryding contends that, in November or December 2002, he also advised the Defendants, in a conversation between Mr Ryding and Mrs Miles and Mr John Stewart, that he intended to alter the roads on the Land to accommodate the weighbridge; that the purpose of installing a weighbridge and altering the roads was to accommodate his customers; and that he needed to submit a development application to the Council for those purposes. He contends that the Defendants (or more precisely, Mrs Miles and Mr John Stewart) informed him that they would consent to his constructing the weighbridge and altering the roads on the Land. Mrs Miles and Mr John Stewart deny that Mr Ryding then advised them that he intended to alter roads on the Land to accommodate the weighbridge or that the purpose of installing a weighbridge or altering the roads was to accommodate his customers and deny that they told Mr Ryding they would consent to his constructing the weighbridge (as distinct from lodging the development application) or altering the roads on the Land. 14Mr Ryding contends that Mrs Miles and Mr John Stewart were authorised to make representations and act on behalf of the third and fourth Defendants, Mr Alan Miles and Mr Gregory Stewart. Mrs Miles and Mr John Stewart deny that they were authorised to make representations and act on behalf of Mr Gregory Stewart and Mr Alan Miles in relation to the Land and no evidence has been led to establish such authority. Mr Ryding contends that, in reliance on the Defendants' advice that they would consent to his constructing the weighbridge and altering the roads, he arranged to have plans drawn up for the construction of the weighbridge and alteration of the roads and purchased a weighbridge in approximately January 2003. 15Mr Ryding's evidence is that he completed the weighbridge DA and handed it to Mrs Miles and Mr John Stewart "for the Defendants to sign to indicate their consent" in about April 2003. Mrs Miles and Mr John Stewart say that Mr Ryding gave them a one page development application form from the Council that did not include the plans which showed the intended alteration to the relevant roads. In May 2003, Mrs Miles and Mr John Stewart signed the weighbridge DA and returned it to Mr Ryding. No consent to lodgement of the weighbridge DA with the Council was sought from Mr Gregory Stewart or Mr Alan Miles at that time. 16Mr John Stewart's evidence was that he showed that development application to Mr Gregory Stewart and Mr Alan Miles and discussed it with them (T176). Mr Gregory Stewart denied this (T181.17-19) but I accept Mr John Stewart's evidence as more consistent with the objective probabilities. 17Mr John Stewart's evidence was that he saw the plans associated with the weighbridge DA which showed the intended alteration to the relevant roads shortly after signing the consent to lodgement of the weighbridge DA (T173.13-14). 18Mr Ryding gives evidence of a conversation with Mr John Stewart, which he appears to place in early 2003, in which he claims Mr Stewart said words to the effect that: "If you give me $10,000 you can have your weighbridge. You'll make that much in 12 months time." Mr Stewart denied such a conversation. Mr Ryding did not contend this conversation (if it occurred) gave rise to any separate breach of, or repudiation of, the Lease and I do not consider it necessary for me to reach a finding about it since it will have no impact on the outcome of the proceedings. 19By letter dated 17 June 2003 (CB1/78), Donovan Oates Hannaford, the solicitors then acting for Mrs Miles and Mr John Stewart (and later for all Defendants) advised Mr Ryding that: "We are aware that our clients provided you with their consent for the lodgement with Kempsey Shire Council of a development application for a weighbridge. That is all their consent was for, namely, the lodgement of the development application. Separate consent is required from them for the actual construction of any works including a weighbridge on their land." 20Mr Ryding lodged the weighbridge DA with the Council on 9 October 2003 ( CB1/84-85) . A letter dated 8 October 2003 from Mr Dutton to the Council also referred to a proposed increase in the extraction volume for the quarry to a maximum of 30,000m 3 per annum (Dutton 10.12.10, MD 15). 21The Council notified Mr Ryding orally in October 2003 and in writing on 9 February 2004 that written consent of all owners of the property was required for the weighbridge DA . Mr Ryding's affidavit evidence was that, on 24 October 2003, he spoke to Mr Alan Miles and Mr Gregory Stewart about providing consent to the weighbridge. Mr Ryding accepted in cross-examination that he had asked Mr Alan Miles and Mr Greg Stewart to sign a consent form in respect of the works to construct the weighbridge rather than to consent to lodgement of the weighbridge DA (T90). Mr Ryding wrote to Mr Greg Stewart and Mr Alan Miles on 30 October 2003 noting that he had not yet received a signed letter of consent to the "installation of a weighbridge" (CB1/86-87). 22Mr Ryding's solicitor wrote to Mr Greg Stewart and Mr Alan Miles on 17 November 2003 and there referred to Mr Ryding's having sought their consent " for the Development Application which he needs to lodge to enable that weighbridge to be installed " (CB1/89-90). If that letter was intended to reformulate the request previously made in Mr Ryding's letter dated 30 October 2003 as a request for consent to lodgement of the weighbridge DA, rather than for the installation of the weighbridge or the associated construction works, it was not a transparent means of communicating any change in that regard. 23By letter dated 25 November 2003, Donovan Oates Hannaford responded to that letter on behalf of Mr Miles raising the possibility of a conflict of interest affecting Mr Ryding's solicitor and taking the point that " the demand you make upon our client is not what clause 2(ii) of the lease provides ..." ( CB1/91). I will deal further with the obligations which that clause placed upon the Defendants below. 24By letter dated 27 November 2003, Mr Ryding's solicitor wrote to Donovan Oates Hannaford denying any conflict and noting that he took the letter dated 25 November 2003 as indicating that "your client [Mr Miles] will not agree to the construction of the weighbridge" (CB1/92). That letter seems to have accurately stated Mr Miles' position so far as he had taken the point that cl 2(ii) of the Lease did not require him to give consent to the construction of the weighbridge. The position of the other Defendants at that time appears to have been that Mrs Miles and Mr John Stewart had already consented to the lodgement of the weighbridge DA with Council and had reserved their position as to the construction works but not indicated that they would not consent to them and Mr Gregory Stewart had not responded to Mr Ryding's request for consent to the installation of the weighbridge or to his solicitor's letter dated 17 November 2003. Donovan Oates Hannaford did not respond to the letter dated 27 November 2003. 25T he weighbridge DA was refused by the Council in June 2004 because all owners of the land had not consented to it its lodgement with Council. 26By letter dated 21 October 2005, nearly two years after the earlier correspondence, Mr Ryding's solicitor noted that no response had been received to his letter dated 27 November 2003 and asked whether Donovan Oates Hannaford had instructions to accept service of proceedings (CB1/95). Donovan Oates Hannaford did not respond to that letter. 27Eight months later Mr Ryding's solicitors again wrote to Donovan Oates Hannaford on 19 July 2006 (CB1/96) noting that Mr Ryding was in a position to commence proceedings and asking whether the Defendants were prepared to have the matter determined by arbitration in accordance with the requirements of the Lease. By letter dated 26 July 2006, Donovan Oates Hannaford wrote to Mr Ryding's solicitor asking for a copy of the weighbridge DA to allow the Defendants to identify to what Mr Ryding was seeking their consent (CB1/97). Further correspondence followed between the respective solicitors. 28By letter dated 26 February 2007, Donovan Oates Hannaford returned an Owner's Consent to the lodgement of the weighbridge DA signed by Mr Alan Miles and Mr Gregory Stewart, which in turn attached the weighbridge DA previously signed by Mr John Stewart and Mrs Miles to indicate their consent to its lodgement (CB1/102, Ryding 30.11.11 Annexure "B") . That letter noted that, while Donovan Oates Hannaford's "clients" consented to the lodgement of the weighbridge DA , they did not consent to Mr Ryding cutting or making any holes or entry points to any of the fencing on the Defendants' property. It was not clear from that letter whether that statement was a statement of the position of all of the Defendants or only of Mr Alan Miles and Mr Gregory Stewart, although on balance I would read it as the former since Donovan Oates Hannaford was then acting for all four Defendants, and Mr Ryding's evidence was that he also read that letter in that way. If that letter is read in that way, it narrowed the area in which the Defendants did not consent to the work from the position previously taken by Mrs Miles and Mr John Stewart. The Defendants' position is consistent with a concern that the Land was used for grazing cattle and that cattle had previously escaped when Mr Ryding had cut holes in fences on the Land. 29By letter dated 3 April 2007, Mr Ryding's solicitors wrote to Donovan Oates Hannaford contending, in my view incorrectly, that the weighbridge DA was not signed by Mrs Miles and Mr John Stewart and seeking confirmation that they consented to the lodgement of the weighbridge DA (CB1/103). T here was no response to that letter. 30Mr Ryding then commenced proceedings. By their Defence to the Statement of Claim, the Defendants pleaded that Mr Ryding had been provided with an owner's consent for the lodgement of the weighbridge DA signed by all four Defendants on 26 February 2007 (para 31) and also denied that they had failed to consent to Mr Ryding performing the work the subject of the weighbridge DA (para 34) . 31By letter dated 19 May 2010 (CB1/108), Mr Ryding's solicitor wrote to the Defendants' solicitor asking: "Do each of your clients withdraw their objection (as set out in your letter dated 23 June 2003) to the construction of the works the subject of the DA and the related works including the construction of roads that are ancillary to the work the subject of the DA?" Mr Ryding characterises the question asked in that letter as a "straight-forward" question. That letter was not, in my view, entirely straightforward, since it sought to attribute a position expressed in the letter dated 23 June 2003 on behalf of Mrs Miles and Mr John Stewart to all Defendants and characterise that position in the manner stated. Donovan Oates Hannaford responded by letter dated 28 May 2010 (CB1/110) in a somewhat unilluminating manner by indicating that the Defence filed by the Defendants set out their position. 32By letter dated 5 August 2010 (CB1/111), Mr Ryding's solicitor repeated the same question and Donovan Oates Hannaford responded on 1 September 2010 (CB1/113) by noting that the answer to that question was as set out in their previous letter. Alleged breach of cl 2 of the Lease by Mrs Miles and Mr John Stewart 33It is convenient to deal first with the alleged breach of cl 2 of the Lease by Mrs Miles and Mr John Stewart and then with the alleged breach of that clause by Mr Alan Miles and Mr Gregory Stewart since they have different content. 34As noted above, Mrs Miles and Mr John Stewart had signed a consent to the lodgement of the weighbridge DA by May 2003 but, by letter dated 17 June 2003, their solicitors had advised Mr Ryding that separate consent was required to undertake the construction works. Mr Ryding contends that Mrs Miles' and Mr John Stewart's failure to consent to the work subject of the weighbridge DA and their purported imposition of a condition that their approval was required for the work the subject of the weighbridge DA breached cl 2 of the Lease. Mr Ryding contends that the express conferral of power on him under cl 2 of the Lease extended to the construction of a weighbridge, control shed and the alteration of the roads on the Land. 35Clause 1 of the Lease relevantly provided that the Defendants demised to Mr Ryding all the quarries, strata seams and deposits of gravel and other minerals which may be got by quarrying and excavations from the surface and open to the daylight and not by underground workings within or under the Land. Clause 2 of the Lease also conferred on Mr Ryding specified liberties including: "(i) To enter upon the said lands and to search for dig work and obtain by excavations and quarryings open to the daylight and not by underground workings the demised gravel and other minerals and to carry away and dispose of the same for their own benefit. (ii) To erect such further buildings and to erect and place such engines and machinery and to open sink and make such quarries levels watercourses and other works whether upon or below the surface of the said lands as may be necessary or convenient. (iv) To use and repair any roads already made and to make use and repair any new roads or ways which may be necessary or convenient for the effectual working carrying away and disposing of the demised gravel and other materials. (vi)Generally to do all things which shall be convenient or necessary for working getting merchantable and disposing of the demised gravel and minerals and for obtaining the benefits of the rights liberties and privileges hereby granted." 36Mr Ryding contends that the work which is the subject of the weighbridge DA is for the purpose of a use of the Land which is permitted under cl 2 of the Lease and the construction of new roads would be permitted under cl 2(iv) of the Lease. In my view, Mr Ryding has not established that Mrs Miles' and Mr John Stewart's failure to consent to the work subject of the weighbridge DA breached cl 2 of the Lease. In my view, that clause confers rights on Mr Ryding which may be exercised providing the relevant works are "necessary or convenient" but does not impose an additional requirement on the Defendants to consent to any particular works. Whether the particular works Mr Ryding proposed, and Council may ultimately have approved, were "necessary or convenient" could only be determined when their precise scope was known. There may have been dispute as to that matter: for example, Mr John Stewart's evidence was that he had concerns relating to the location of the proposed road on the western boundary where there was already a roadway on the eastern boundary of the property (T173). Whether or not there was such a dispute, Mr Ryding was entitled to carry out those works without further consent of the Defendants if they were within the specified liberties under cl 2 of the Lease and, if they were not, then he was not. In my view, cl 2 of the Lease did not require the Defendants to engage in an anterior step of consenting to proposed works in advance, particularly when they were described only in the most general terms and, as Mr Ryding conceded in cross-examination, further amendments to them might have been required by Council in the course of considering the weighbridge DA . 37In my view, Mr Ryding has also not established that Mrs Miles' and Mr John Stewart's purported imposition of a condition that their approval was required for the work the subject of the weighbridge DA breached cl 2 of the Lease. T he view expressed by Donovan Oates Hannaford in their letter dated 17 June 2003 (CB1/78) that separate consent was required from Mrs Miles and Mr John Stewart for the construction of any works including a weighbridge on the land did not accurately reflect the effect of cl 2 of the Lease, which permitted such work if it was necessary and convenient within the terms of the clause. However, Mr Ryding did not contend that the expression of an incorrect view of that clause amounted to a repudiation of the Lease and I do not consider that any other breach of the clause was established. Mr Ryding at all times had the rights conferred on him under cl 2 of the Lease, irrespective of any views expressed by Mrs Miles and Mr John Stewart as to the extent of those rights. 38I should add that Mr Ryding did not plead or rely on any implied obligation on each party to the Lease to do all such things as are necessary on its part to enable the other party to have the benefit of the contract, including a negative covenant not to hinder or prevent the fulfilment of the purpose of an express promise: Mackay v Dick (1881) 6 App Cas 251; Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126 at [36]; Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 at 607-608. An implied contractual duty to co-operate could well have been established but would be limited to the contractual obligations contained in the contract and would not extend to bringing about something which the contract did not require to happen: Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1988) 43 NSWLR 104 at 124-125. Such a duty would likely have required the Defendants at least not to obstruct the conduct of works permitted by cl 2 of the Lease, but only to the extent that such works were "necessary or convenient" so as to fall within the provisions to which I have referred above. Alleged breach of cl 2 of the Lease by Mr Alan Miles and Mr Gregory Stewart 39Mr Ryding also contends that Mr Alan Miles and Mr Gregory Stewart failed to consent to the weighbridge DA until 26 February 2007, in breach of cl 2 of the Lease. Clause 2 of the Lease does not, in its express terms, require the owners of the Land to consent to the lodgement of a development application in respect of works which fall within the permissions granted under that section. Mr Ryding did not plead or rely on a term implied in fact as to any obligation to consent to the lodgement of a development application, as distinct from an implied obligation to consent to the works the subject of a development application, to which I will refer below. 40Although Mr Ryding did not, I think, put this submission in terms, I consider that an obligation for the Defendants to consent to the lodgement of a development application in respect of works which were otherwise permitted under cl 2 of the Lease would arise as an application of the wider implied obligation of each party to the Lease to do all such things as are necessary on its part to enable the other party to have the benefit of the contract, including the implied covenant not to hinder or prevent the fulfilment of the purpose of an express promise under the Lease. To put it another way, the Defendants would not be entitled, consistent with that implied obligation, to deprive Mr Ryding of the rights which cl 2 of the Lease conferred by declining to consent to the lodgement of a development application which was necessary for Mr Ryding to take advantage of those rights. 41However, I do not consider that Mr Ryding established that Mr Alan Miles and Mr Gregory Stewart were asked for such consent prior to early 2007 when they gave it. Mr Ryding's letter dated 30 October 2003 to Mr Greg Stewart and Mr Alan Miles asking them to consent to the "installation of a weighbridge" (CB1/86-87) rather than to the lodgement of the weighbridge DA . Whether deliberately or not, this request was for a wider consent to which Mr Ryding was not then entitled (for the reasons I have noted above) rather than the narrower consent to lodgement of the weighbridge DA to which he was, I think, entitled (for the reason noted above). Mr Ryding accepted in cross-examination that that he had not personally asked Mr Alan Miles or Mr Greg Stewart to sign any development application as distinct from the consent form in respect of the works (T90). To the extent that Mr Ryding's solicitor's letter to Mr Greg Stewart and Mr Alan Miles dated 17 November 2003 may have sought to reformulate the request which Mr Ryding had previously made, it did not clearly or transparently do so, so as to make clear that Mr Greg Stewart and Mr Alan Miles were now being asked for something different to what had been previously been requested from them. 42As I noted above, there is also a dispute on the evidence as to whether Mr Ryding provided Mr Alan Miles or Mr Greg Stewart with the original or a copy of the weighbridge DA . Mr Greg Stewart's evidence was that he first saw the weighbridge DA when it was provided to him for his signature by his solicitor in February 2007 (T182). Mr John Stewart's evidence was that he had shown the weighbridge DA to Mr Greg Stewart in about April 2003 and Mr Greg Stewart denied that (T181). It is unclear whether, if the weighbridge DA was shown to Mr Greg Stewart, the relevant plans were attached to it. Mr Alan Miles gave no evidence as to this matter and it was not put to him in cross-examination that he was shown the weighbridge DA or associated plans prior to February 2007. I do not consider it necessary to determine this dispute given the findings that I have reached above. 43Mr Ryding also contends that Mr Alan Miles and Mr Gregory Stewart breached cl 2 of the Lease by purporting to impose a condition on the construction works in their letter of 26 February 2007. To the extent that Mr Ryding was entitled to conduct the works, that entitlement arose under cl 2 of the Lease and the condition purportedly imposed by Mr Alan Miles and Mr Gregory Stewart did not prevent the exercise of that entitlement. Mr Ryding was free to disregard that condition provided that cutting fences was in fact necessary and convenient for the purposes of that clause. Mr Ryding did not contend that the expression of an incorrect view of this clause amounted to a repudiation of the Lease and I do not consider that any other breach of the clause was established. Breach of cl 12 of the Lease 44Mr Ryding also pleaded a breach of cl 12 of the Lease. That breach was not pressed in closing submissions. Alleged breach of implied term in respect of construction works 45Mr Ryding also pleaded that the Lease contained an implied term that, if the Defendants consented to or were required to consent to his lodging a development application and that development application was approved by the Council, their consent extended to his performing the work the subject of the development application. Counsel for Mr Ryding confirmed in his oral closing submissions that Mr Ryding pressed this claim. 46The Lease is complete on its face and the requirements for the implication of such a term are those set out by the majority of the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-283, as approved by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 347, namely the specified term (1) must be reasonable and equitable; (2) must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; (3) must be so obvious that 'it goes without saying'; (4) must be capable of clear expression; and (5) must not contradict any express term of the contract. 47In my view, the suggested implied term does not satisfy several of those requirements. First, I do not consider that term is reasonable and equitable. If Mr Ryding submitted a development application to the Council, it could be approved by the Council on a range of conditions and the work which was involved could be carried out in a range of ways, some of which would be more intrusive and some of which would be less intrusive on the Land. Mr Ryding accepted in cross-examination, as was plainly the case, that the development application which was ultimately approved by Council could differ from the original application and the conditions of consent imposed by Council might have affected the Defendants' position as owners of the Land (T80). T he relevant term would not operate reasonably or equitably where it would permit such conditions to be imposed on the Defendants without any balancing of the extent of any detriment to the existing use of the Land against any benefit of the work to Mr Ryding's business. 48Second, the implication of a term also depends upon the demonstration of necessity: Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 452-453; Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104. In my view, the suggested term is not necessary to give business efficacy to the Lease which is effective without it. In particular, cl 2 confers certain rights on Mr Ryding in respect of the use of the land and cl 12 already contains an express term permitting Mr Ryding's continued use of the land. If Mr Ryding was entitled to conduct the work under the express rights conferred in cl 2, he did not require the Defendants' further consent to it. 49Third, for the reasons that the suggested term is not, in my view, reasonable and equitable, it is also by no means so obvious that it goes without saying. Fourth, in my view, the suggested term would also contradict the express terms of the contract, so far as cl 2(vi) of the Lease limits Mr Ryding's rights to doing things which are "convenient or necessary" in respect of getting and disposing of the demised gravel whereas the suggested term contains no such limitation. 50Mr Ryding relies on the fact that, as noted above, the Defendants had consented to the construction of a sound wall and a drain on the land in September 2002 to support the implication of the term. In my view, these matters provide no support for the suggested implied term. First, the fact that the Defendants chose to consent to particular works did not acknowledge any obligation to give such consent. Second, the giving of that consent would be consistent with the express right conferred on Mr Ryding to do such things which were convenient or necessary for getting and disposing of the demised gravel, at least in circumstances that the Defendants appear to have taken no point that the erection of the sound wall or the construction of the drain was not convenient or unnecessary. 51Mr Ryding contends that the Defendants are in breach of the implied term for which he contends. I do not consider that breach is established, because I do not consider the Lease included an implied term to that effect for the reasons noted above. The pleaded implied term would also take effect only on approval of the weighbridge DA by the Council, which did not occur. Loss or damage for breach of contract 52Mr Ryding contends that he has lost the opportunity to obtain approval of the weighbridge DA and that that led to his loss of opportunity to obtain development approval for an increased extraction rate from the quarry and his loss of the resulting profits. Mr Ryding does not seek to quantify expectation damages referrable to the lost opportunity to obtain approval for the weighbridge DA , as distinct from his wider claim referable to the loss of opportunity for an increased extraction rate of gravel from the quarry. 53Mr Ryding concedes that the loss he claims involves a degree of speculation. However, that does not necessarily exclude recovery for that loss: McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 at 412; Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 643; Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64. In order to establish damages for the loss of opportunity to earn a profit, Mr Ryding "must prove, on the balance of probabilities, that his or her expectation of a certain outcome, as a result of the performance of the contract, had a likelihood of attainment rather than being mere expectation": Commonwealth v Amann Aviation Pty Ltd at 80. 54Mr Ryding contends that, if Mr Gregory Stewart and Mr Alan Miles had consented to the weighbridge DA in October 2003 and Mrs Miles and Mr John Stewart had not breached the Lease by imposing a condition by which consent was required before work was carried out, the Counsel would have approved the weighbridge DA within three months of its lodgement in October 2003. 55Mr Ryding relies on the evidence of Mr Dutton, who is an engineer by training but had significant experience as an engineer and manager with Council, prepared management plans for the gravel quarries operated by the Council and, after he left the Council, acted for a developer in obtaining approval for a new quarry approximately 400 metres away from the Land. Mr Dutton's evidence is, in summary, that if the Defendants had consented to the weighbridge DA, it would have been approved by Council in around January 2004 and the work the subject of the weighbridge DA would have taken about three months to complete. Mr Ryding also relies on the fact that a number of items on the Council checklist had been ticked off, but the evidence was that this was the result of counter staff's practice of checking whether the relevant documents had been submitted and did not indicate anything as to the ultimate outcome of the application (Haigh T232). 56The Defendants rely on the evidence of Ms Haigh, who is an experienced town planner and previously held the position of Chief Town Planner at Council. The Defendants contend that the weighbridge DA did not comply with the requirements for a development application, in accordance with the Environmental Planning and Assessment Regulation 2000 (NSW), Sch 1, Pt 1, cl 2. The Defendants point out that the weighbridge DA did not contain a statement of environmental effects addressing the requirements of s 79C of the Environmental Planning and Assessment Act 1979 (NSW) , nor was there a correct property description, a statement of the true cost of the proposal, clear and professionally draft plans, any ecological assessment or erosion and sediment control measures ( Haigh 8.5.09, Annexure GH, [8]-[10]) . Ms Haigh expressed the view that the weighbridge DA and supporting material did not "comprise sufficient information to enable any reasonable and professional Council Planner to approve the application" ( Haigh 17.3.11, [7]) . Mr Dutton accepted in cross-examination that unless these deficiencies were remedied, the weighbridge DA would have been refused ( T217.34-38) . 57Ms Haigh's evidence was also that the proposed weighbridge and access road traversed within 40m of a water course and the weighbridge DA should have identified the application as requiring "integrated approval" under the Rivers and Foreshores Act 1948 (NSW), and that the Council could not grant consent for the development without such approval, by reason of Environmental Planning and Assessment Act s 91A(2) (Haigh 21.10.09, Annexure A, [2(x)]). 58The Defendants contend that whether Council would have granted approval to the weighbridge DA, or if it had done so, when that approval would have been given, is wholly speculative. However, Mr Dutton and Ms Haigh expressed the view in their joint report (Ex P2) and on cross-examination that, although there were some difficulties with the form of the weighbridge DA, they could have been addressed so that it would be approved (Dutton T196.29-32; Haigh T198). On the basis of that view, I would have held that (had Mr Ryding established a breach of the Lease, contrary to the findings which I have made above) that he had established that breach was causative of his loss of the opportunity to obtain approval for the weighbridge. However, Mr Ryding's failure to lodge the weighbridge DA, after he received all Defendants' consent to do so in late February 2007, would mean that he could not have established causation for any loss suffered after that date on this basis. 59However, as noted above, Mr Ryding does not seek to quantify loss of opportunity (as distinct from reliance) damages on the basis of the lost opportunity to operate the weighbridge. His claim for damages for lost opportunity depends on the additional propositions that he was prevented from lodging a further development application to expand the permitted extraction capacity of the quarry from 5,200m 3 per annum (which was the extraction level approved by Council based on "existing use" rights for the Land) to 20,000m 3 per annum by reason of his inability to have the weighbridge DA approved; thereby prevented from obtaining approval for production at that expanded capacity; and thereby prevented form realising the profits which would have been made had the quarry operated at the expanded capacity. I cannot accept the propositions on which that claim depends. 60The first difficulty with that claim is the link which Mr Ryding seeks to make between having the weighbridge DA and obtaining approval to an expanded capacity for the quarry. Mr Ryding's affidavit evidence was that his application for approval to construct a weighbridge and control shed and alter the roads was the initial step in an application to expand the quarry (Ryding 10.12.10 [52]-[57], [60]-72], CB1/45-48). Mr Ryding contends that there was no point in having approval for increased extraction absent approval for a weighbridge (Ryding 10.12.10 [108]ff; T102.44-104.20). 61However, a development application for an increase in the extraction rate for the quarry could have been lodged independently of the weighbridge DA . Mr Ryding had at least indirectly raised the possibility of an increased extraction rate to 10,000m 3 in early 2002 in the letter dated 24 January 2002 from Mr Dutton to Council (Ex D5) (see also Ryding T61-62, Dutton T208). Mr Ryding accepted in cross-examination that, at least at that time, he did not consider it necessary to have a weighbridge in order to increase the extraction rate of the quarry above 5,000m 3 per annum (T63). Mr Ryding contended that the absence of a weighbridge deprived the quarry of potential custom and an application for an increased extraction rate of utility. However, Mr Ryding's affidavit evidence in support of that contention was limited, referring to the loss of two potential customers ( Ryding 10.12.10, [110]-[113]), and his additional evidence in cross-examination as to changes in the policy of government or the Council to require the use of weighbridges was weakened by the absence of evidence that they had been substantial customers of his business (T65-68, T154). 62In my view, the evidence also establishes that, had Mr Ryding wished to expand the capacity of the quarry, he could have used other local weighbridges for customers that required a weighbridge and lodged the development application for expanded capacity whenever he wished to do so. Mr Ryding acknowledged in cross-examination that other weighbridges were available for public use in 2003 or 2004 at Matthews Metal Management in South Kempsey and at the Council and that he made no attempt to seek to use those weighbridges (T117). Another weighbridge was located close to the quarry at Everson's Abattoir and was available for public use. Mr Ryding's evidence was that he approached Mr Everson and asked to use his weighbridge and was refused permission to do so. Mr Everson's evidence, which I accept, was that he has " never knocked back anyone using my weighbridge " ( Everson 7/12/11, [4], T186) . 63There is also a significant issue as to whether Mr Ryding was in fact committed to seeking an increase in the extraction rate of the quarry in the relevant period. It appears that Mr Ryding decided not to pursue the possibility of an increase in extraction rates of the quarry when he first raised that possibility with Council in early 2002. Mr Dutton's evidence was that the reasons for that decision included the adverse reaction of local residents and the Council and that there were "economic reasons" for that decision, "whether it was economic to do it, whether there was a supply/demand for the material", and whether there "would there be demand for the material if he [Mr Ryding] undertook the quite costly increase in excavation, extraction; would he be able to comply with any requirements of council" (T215). 64Mr Ryding conceded in cross examination that he had abandoned his intention to expand the quarry by late 2003 when he failed to obtain government funding for that expansion (T133). In closing submissions, Mr Ryding accepted that, if that evidence is accepted, then he will fail to establish causation. However, Mr Ryding contended that his evidence in that regard was wrong, relying on correspondence from his solicitor after 2003 and on correspondence with the New South Wales Department of State and Regional Development in early 2006. 65I do not consider the correspondence from Mr Ryding's solicitor on which Mr Ryding relies takes the matter further, particularly having regard to the long delays which occurred in that correspondence and the delay in initiating and then progressing proceedings. In my view, that correspondence indicates that Mr Ryding sought to maintain his legal rights, but does not allow me to draw any conclusion that he had any real intention to expand the quarry at that time, as distinct from an intention to pursue a claim against the Defendants. 66In my view, the correspondence with the New South Wales Department of State and Regional Development in 2006 (Exs P4 and P5) indicate at least that Mr Ryding was pursuing government funding for an expansion of the quarry in 2006, but do not indicate that he had held that intention continuously from 2003. Mr Ryding's correspondence with the New South Wales Department of State and Regional Development in 2006 also indicates that there were significant unresolved issues in respect of any government assistance for expansion of the quarry, including the absence of external funding, and that ultimately State Government assistance depended upon Mr Ryding obtaining finance through the Commonwealth Government or a commercial provider. There is no evidence that such finance was available. While reference was made in that correspondence to the fact that expansion of production of the quarry would require development approval, the correspondence does not suggest that the absence of such approval was the primary obstacle to such expansion. 67In my view, the concession made by Mr Ryding in cross-examination should be accepted, as a matter of substance, with the limited qualification that Mr Ryding was unsuccessfully attempting to secure government assistance in 2006. Mr Ryding plainly understood the elements of his case and a concession against interest is more likely to be reliable. That concession is consistent with other evidence, including the correspondence indicating difficulty with obtaining either external funding or government assistance and should be more readily accepted in the absence of other evidence from Mr Ryding as to his capacity to raise the funding necessary for an expansion of the quarry. It is plain that the costs incurred in obtaining approval for the development application for an increased extraction would themselves have been substantial (the range given by the parties' experts being $20,000-$120,000 (T236)) quite apart from the further costs of performing the works which Mr Ryding contemplated. 68The next issue arising in this claim is whether Council would have approved a development application for an increased extraction rate from the quarry. That issue is ultimately not necessary to a determination of the proceedings since I have accepted Mr Ryding's concession in cross-examination that he had abandoned his expansion plans by reason of the funding difficulties and Mr Ryding accepts that is sufficient to defeat his causation claim. However, I should indicate the findings which I would have reached in that regard in case an appeal is brought from my decision. 69Mr Dutton's evidence was that the obstacles to an approval of a development application for increased extraction could have been overcome and that approval would have been granted (Ex P2, Q12), whereas Ms Haigh identified several issues as to that application and indicated that she was unable to form a view whether it would have been approved. Mr Dutton's evidence was that he had obtained approval in 2002 for a new quarry 400 metres from Mr Ryding's quarry in an area which was of greater environmental sensitivity than the Land (Dutton 10.12.10 [10]; Dutton 2.12.11 [105]). 70It appears that the expansion application in respect of the quarry would have been a "designated development" for the purposes of Schedule 3 to the Environmental Planning and Assessment Act , because of the use of blasting at the quarry. An Environmental Impact Statement would have been required under s 78A(8) of the Environmental Planning and Assessment Act , requiring the provision of a formal specification by the Director-General of the Department of Planning in accordance with the Environmental Planning and Assessment Regulation. Ms Haigh's evidence was that the documentation supporting an Environmental Impact Statement would require extensive professional reports and would be subject to a high level of scrutiny by relevant State Government agencies (Haigh 8.5.09, Annexure GH, [26]), dealing with matters such as traffic operation, dust, noise, water quality and vegetation clearing (Haigh 10.9.09, [2(xxiii)-(xxiv)]; Haigh 17.3.11, [10]). In addition, a designated development application would have given rise to third party appeal rights in the Land and Environment Court pursuant to s 98 of the Environment Planning and Assessment Act . Ms Haigh's evidence was that "the prospect of potential third party appeals, can result in consent authorities being very careful not to approve a designated development until the level of documentation, technical information and proposed ameliorative measures is sufficient and defendable should a third party appeal arise" ( Haigh 17/3/11, [16]) . The Defendants contend that there is no evidence before the Court that would enable it to conduct any assessment as to the likelihood of the Council granting its approval to such a significant development application. 71The Defendants also point to the likelihood of community opposition to any application to the Council to increase the output of the quarry. There is evidence that letters of objection were submitted to the Council in respect of Mr Ryding's earlier development application for a crusher (Ex D5), complaints were made after consent was given to that development application in December 2002 (CB1/269) and Mr Ryding accepted in cross-examination that increased dust from an increased extraction level would have been a "significant concern for local residents" (T85). Mr Dutton confirmed to Council in March 2002 that there was "no intention to expand the output or excavation at the quarry, which will remain at an average of 5,000 cubic metres per annum" and that "any expansion of the disturbed area or gravel output would be the subject of a separate application, which would possibly require contributions for road upgrading and other conditions". It appears that Mr Ryding took that position because of the reaction of local residents and the Council to the earlier suggestion of an increased expansion rate (Dutton T213); and Mr Dutton's evidence was that "there were obvious or possibly complications of objections about the increased output" and that he shared Mr Ryding's concerns as to the adverse reaction of local residents and the Council to an increase of the output of the quarry (T214). Ms Haigh's evidence was also that an increased extraction level to an average of 20,000 m 3 per annum was likely to generate a significantly higher level of complaint arising from the additional truck movements and noise effects (T213). 72Mr Dutton commented in the course of his oral evidence that the development application for an increase in the extraction rate was "very hypothetical I suppose" (T196) and Ms Haigh expressed the view that she could "only reach an opinion if I have an application and the requirement, the specification to compare it against" (T233). Both experts agreed that the potential obstacles to the application were uncertain until the Director General's requirements and the Environmental Impact Statement specification were known ( Ex P2, p.2, A10) . 73Had I found that a breach had been established, I would have held, as the Defendants contend, that Mr Ryding's opportunity to increase the rate of expansion from the quarry was so speculative that the Court could not award any (or only nominal) damages in respect of it: Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 at 364. In my view, the matters to which I have referred above, and most importantly the obstacles to Mr Ryding obtaining development approval for an expanded quarry by reason of environmental issues or opposition by local residents and the likelihood that he could not have funded the expansion of the quarry even if such approval had been obtained, require that result. Remoteness 74The Defendants also contend that Mr Ryding's losses are too remote from the Defendants' breaches to be recovered. 75The principle in Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145 indicates that a Plaintiff is entitled to recover such damages as arise naturally, that is according to the usual course of things from the breach, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach. In Koufos v C Czarnikow Ltd [1969] 1 AC 350 at 385, Lord Reid observed that: "The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation." That statement of principle was endorsed by the High Court in Wenham v Ella (1972) 127 CLR 454 at 471-472; Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653 at 658 per Gibbs CJ, 667 per Wilson, Deane and Dawson JJ and Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344 at 368; and also adopted by Sheller JA in Carpenter v McGrath (1996) 40 NSWLR 39 at 58 and by the Federal Court in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; (2003) 128 FCR 1 at [938] . 76Mr Ryding contends that the damages claimed are not too remote, because the Defendants did not permit him to exploit his legal rights and he was therefore unable to extract all the gravel from the land, and must have known that their failure to consent was frustrating his commercial operations and particularly his ability to make a profit. Mr Ryding contends that the loss suffered, namely the loss of profit from selling the gravel, was loss which would ordinarily follow from the breach. He also relies on his evidence that he had disclosed the proposed expansion of the quarry to the Defendants. I have referred above to the extent to which that evidence was qualified by his cross-examination. On the other hand, the Defendants contend that it would not have been within the parties' contemplation that a failure to consent to lodgement of the weighbridge DA would have led to the loss of the ability to increase the expansion rate of the quarry. 77The parties' different positions reflect a difference in what they contend needs to be within the parties' reasonable contemplation, namely (on Mr Ryding's case) a loss of profit from the extraction of gravel or (on the Defendants' case) a loss of profit which would have been derived from the expansion of the quarry's operations. In Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310, McHugh JA warned against adopting an unduly specific "level of classification of the damage which the parties must have contemplated", and observed that the test of what the parties could reasonably have been expected to have contemplated was not by reference to "the precise details of the events giving rise to the loss" but rather it was "sufficient that they contemplate the kind or type of loss or damage suffered". In Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [38]-[39], Santow JA (with whom Mason P and Brownie AJA agreed) expressed his agreement with a submission that: "One does not need to contemplate the precise degree of loss, or its scale, as that is to raise the bar too high; one is then looking at "the precise details of the events giving rise to the loss". Instead of adopting an unduly high level of classification of the damage as that which the parties must have contemplated, it suffices to concentrate more broadly on the kind or type of loss ..." 78On balance, had the breach and causation for which Mr Ryding contends otherwise been established, I would not have held that his losses were too remote since the parties would reasonably have contemplated a loss of profits from production from the quarry as the kind of loss which would arise in the ordinary course from such a breach, although the quantum of those losses would here have been increased by Mr Ryding's loss of the opportunity to expand the quarry. However, it is ultimately not necessary for me to decide this question given the other findings which I have reached. Failure to mitigate 79The Defendants contend that Mr Ryding failed to mitigate his loss and bear the onus of establishing that defence: TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130 at 138; Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 at [187]; Dhailwal v Pade [2003] NSWCA 16. An innocent party "is only required to act reasonably" in mitigating its loss and " the standard of reasonableness is not high in view of the fact that [the defendant] is the wrongdoer": Segenhoe Ltd v Atkins (1990) 29 NSWLR 569 per Giles J at 583. 80The Defendants contend that Mr Ryding failed to mitigate his loss by not commencing proceedings seeking specific performance against Mr Alan Miles and Mr Gregory Stewart requiring that they sign the weighbridge DA . The Defendants acknowledge that an innocent party is not obliged to embark upon doubtful litigation in order to mitigate its loss but contend that it must commence litigation if to do so would avoid or minimise its loss, where such litigation is neither costly nor complicated, and is reasonable in the circumstances: Pilkington v Wood [1953] Ch 770; St George Commercial Credit Corp Ltd v Collins Wallis Properties Pty Ltd [1998] NSWSC 649; Dhailwal v Pade above; Bebonis v Angelos [2003] NSWCA 13; (2003) 56 NSWLR 127 at [99]). The Defendants contend that an application for an order in late 2003 that Mr Greg Stewart and Mr Alan Miles give their consent to the lodgement of the weighbridge DA would have been "simple and straightforward" and point out that Mr Ryding threatened the commencement of such proceedings on several occasions. I am not satisfied that such litigation would have been either simple or straightforward, where the Defendants were likely to have defended it by raising issues (as they did in the Defence in these proceedings) as to the legal effect of the Lease, the terms of the Lease and the adequacy of the communication of the request for consent to lodgement of the weighbridge DA to Mr Greg Stewart and Mr Alan Miles. I do not find that a failure to mitigate is established on this basis. 81The Defendants also contend that Mr Ryding failed to mitigate his loss by failing to relodge the weighbridge DA with the Council in February 2007 when he had the consent of all four owners to do so. Mr Ryding acknowledged in cross-examination that the Defendants had provided their consent to the weighbridge DA by 26 February 2007 and the most obvious thing for him to have done would have been to have lodged the weighbridge DA with Council and that he decided not to take that course (T103-104, T111-112). Mr Ryding contends that there was no point in putting in an application to Council after February 2007 having regard to the first and second Defendants' attitude that the work the subject of the weighbridge DA could not be done, and noting all of the Defendants' attitude that there was no entitlement to do that work. However, this misunderstands the operation of cl 2 of the Lease which, as I have noted above, permitted the work without further consent by the Defendants provided it was necessary and convenient to the exercise of the rights conferred on Mr Ryding. In my view, this is a matter which goes to causation, rather than a matter of mitigation, and would have limited the period for which Mr Ryding was entitled to recover loss had he otherwise been successful in his claim. 82The Defendants also contend that Mr Ryding's ceasing extracting gravel at the rate which was approved under the existing development approval of up to 5,200m 3 per annum in about 2008 or 2009 and on his failure to continue to operate the quarry (T21.25-27) amounted to failures to mitigate his loss. Mr Ryding's evidence was that the available market for his gravel was limited without a weighbridge (Ryding 10.12.10 [121]-[122]). However, I have pointed above to the evidence that other weighbridges were available for Mr Ryding's use. In my view, this is not a matter of mitigation but a matter which would be relevant to the quantification of damages had Mr Ryding otherwise been successful in his claim. Quantification of lost opportunity 83Mr Ryding contends that, but for the Defendants' breaches, the weighbridge DA would have been lodged in October 2003 and approved by December 2003; and a development application for increased extraction would then have been prepared and lodged and approved in 12 months by December 2004 which would have permitted Mr Ryding to extract 20,000m 3 of gravel per year. Mr Dutton's evidence was that there is sufficient gravel at the quarry for the maximum rate to have been extracted until the conclusion of the Lease in April 2012 and the conclusion of the 5 year option (Ex P3). Mr Ryding quantifies his loss on this basis in the sum of $450,988 plus future loss for approximately 1 year from the date of judgment. 84Had Mr Ryding otherwise established his claim for damages, the quantification of that claim would need to be adjusted since the evidence does not establish that Mr Ryding sought to, or would have been permitted to, increase the extraction rate of the quarry to an average of 20,000m 3 per annum, which is the figure adopted in Mr Ryding's quantification of his loss. Mr Ryding's affidavit evidence was that, had the weighbridge application been approved, he proposed proceeding with an application to increase the amount of gravel extracted to an average of 10,000m 3 , with a maximum rate of 20,000m 3 per annum (Ryding 30.11.2011 [81]). I understand this evidence to indicate that the average extracted over time would be 10,000m 3 , even if double that quantity were extracted in any one year. That evidence does not support a quantification of Mr Ryding's loss on the basis of an average extraction rate of 20,000m 3 per annum. Both Mr Ryding and Mr Dutton accepted in cross-examination that the only work that has been done in relation to an application to the Council for increased extraction related to an increase in output to 10,000m 3 per annum (Ryding T84-85, Dutton T209). Mr Dutton also accepted in cross-examination that Council would have required the extraction to be staged (T221) and his evidence that Council would approve an application for an increased expansion rate was directed to an average of 10,000m 3 per annum not a higher figure (T224). 85Mr Ryding gave evidence that the cost of extracting the increased quantity of gravel would be $7.50 per cubic metre (Ex P1) although he was cross-examined at length as to expenses (T146ff). Mr Ryding's evidence was that equal quantities of DGB20 grade and DGS40 grade gravel would have been produced (Ryding 10.12.10 [116], T153) and the price which could be obtained was $18.80 per cubic metre for DGB20 grade and $13.00 per cubic metre for DGS40 grade and an average of those prices was $15.90 per cubic metre as at January 2004. Mr Ryding then asks the Court to assume that an increase in price over time would have been matched by an increase in the expenses, so the net profit per cubic metre from December 2004 would be $8.40 per cubic metre. I do not think I could properly have made that assumption when evidence as to the price at which gravel sold and the costs incurred in producing it over the period would have been available but was not led. 86The Defendants comprehensively challenged Mr Ryding's quantification of his loss and contended that the expansion of the quarry would have been loss-making. On the basis of Mr Ryding's estimates, the total revenue of the quarry would have been $159,000 per annum if Council had approved an extraction rate of 10,000m 3 per annum. Significant capital or financing costs would have been incurred in respect of the acquisition of a crushing plant. Mr Ryding's evidence in cross-examination in respect of costs based on an average of 10,000m 3 per annum (T158) was that he would have incurred costs for fuel and explosives of about $50,000 and $10,000 per annum respectively (T148-149); additional employment expenses (annually) for four plant operators of about $60,000 in total and of four to six contract truck drivers of, say, $40,000; additional maintenance, fuel, mechanical, service or other personnel costs of $20,000; and wages of one driller of $15,000 and one weighbridge operator of $30,000. These annual costs total approximately $235,000, and Mr Ryding would have incurred additional costs of a licence under the Environmental Planning and Assessment Act and insurance (T151). It is possible that Mr Ryding may have been unduly conservative in these estimates but there is no other evidence of the likely costs involved. The costs estimated by Mr Ryding significantly exceed his estimate of the revenue from the quarry, and a finding that the expansion was not viable for that reason is supported by the evidence that he did not proceed with the expansion proposal in 2002 on economic grounds. I would have held that Mr Ryding had failed to establish any loss by reason of these matters, had he otherwise succeeded in establishing his claims. 87Mr Ryding conceded that allowance would also have to be made for several expenses, namely $32,000 for the construction of weighbridge (Ryding 10.12.10 [67]) and $60,000 for the costs of the development application for increased extraction and any amendments to the weighbridge DA (the range given by Mr Dutton and Ms Haigh is $20,000 to $120,000 - see T236). Mr Ryding also conceded that he would have been unable to earn half the income on his tax returns in each year from the date of approval of the increased extraction DA, because he would have been required to spend additional time at the quarry, and would not have been able to earn $60,000 from work which he subsequently undertook overseas in Dubai if the development application for increased extraction had been approved. 88I should note that a further difficulty with Mr Ryding's damages claim is that Council had issued an order on 4 February 2008 pursuant to the Environmental Planning and Assessment Act , requiring the cessation of quarrying activities for failure to comply with the statutory requirements relating to the lodgement of returns (Steven Miles 7.12.11, SM 24; State Environmental Planning Policy 37 - Continued Mines and Extractive Industries, Ex D2, cl 15). Mr Ryding accepted that he had not submitted such returns to Council after April 2003 but sought to rely on a conversation with a Council officer who he claimed had told him it was the landowner's rather than the quarry operator's obligation to lodge such returns (T114). In any event, Mr Ryding took no steps to request the Defendants to provide that information to Council (T116). These matters suggest that Mr Ryding may not have intended to operate the quarry after April 2003, but it is not necessary to determine that matter given the other findings I have reached above. Reliance damages 89Alternatively, Mr Ryding claims reliance damages arising from his purchase of a weighbridge frame for approximately $3,000 (Ryding 10.12.10 [67]). Since I have not found the alleged breaches to be established, this claim is not established. Claim in negligent misrepresentation 90Mr Ryding also pleaded a claim in negligent representation, alleging that the Defendants owed a duty of care to Mr Ryding to exercise all reasonable care and proper skill and care in making the alleged representations that they would consent to him constructing a weighbridge and altering the roads on the land alleged to have been made in November or December 2002; that they breached that duty; and that he relied upon those representations in incurring costs in relation to the construction of a weighbridge and the alteration of roads on the land. This claim was not pressed in closing submissions. Declarations 91Mr Ryding sought a declaration on that, in the event that the Council approves the development application that was lodged on or about October 2003, he is entitled to perform the work the subject of that application. Alternatively, he seeks a declaration that under clause 2(ii), 2(iv) and 2(vi) of the Lease, he is entitled to perform the work described in that application. 92In my view, there are several reasons why declarations in either form could not be granted. The first is that the Council refused that development application in June 2004 and there is no evidence before me to suggest there is any possibility that that particular application could now be approved. The second is that Mr Ryding's entitlement to perform the work will, as I have noted above, depend upon whether the particular work is within the scope of the liberties granted under cl 2 of the Lease, including whether that work is "necessary or convenient"; and that would need to be determined not at a level of generality but by reference to the detail of the work permitted or required under any further development application which Mr Ryding might lodge. Short Minutes of Order and costs 93Accordingly, the proper order is that the proceedings be dismissed. In the ordinary course, costs should follow the event. However, I will hear the parties as to costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 March 2012